from the urls-we-dig-up dept

Who doesn't like a fast broadband connection? The faster, the better! The only problem seems to be that there are some capacity limits with current technology. Details, details. But what if there were some technologies that could vastly increase those capacity limits? There might be some awkward situations where fiber-based internet service wasn't as fast as a wireless connection. Perhaps ingrained data cap pricing tiers would still stick around? Here are just a few developments that could bring much faster broadband (someday, maybe).

from the your-call-is-not-important-to-us dept

While the government and industry pay a lot of lip service toward expanding broadband availability and competition, we've noted how giant phone companies like AT&T and Verizon are actually backing away from unwanted DSL markets. Through a combination of apathy (failing to repair the lines timely) and price hikes for services that cost less than ever to offer, the telcos are actively driving DSL users to either cable competitors or wireless (or both, since cable operators now help sell Verizon wireless services). Fixed-line broadband is perfectly profitable, it's just not profitable enough quickly enough for telco investors.

As a result, these companies are shifting their attention to significantly-more-expensive wireless services with caps and overages, and pretending this is just as good as an uncapped, less expensive DSL line. The result? A huge swath of the country where the cable broadband monopoly is going to be more potent than ever, resulting in worse customer service (if that's even possible) and higher prices than ever before.

Of course, AT&T and Verizon can't just come forth and say that they no longer care about huge swaths of the country, so as they go state to state trying to gut all regulations requiring they continue to offer fixed-line services, they're claiming that if state legislatures do their bidding, the states will somehow be awash with amazing new technologies. AT&T calls this the "IP transition," and has been successful in conflating a general shift toward wireless and IP networks with the company's refusal to upgrade fixed-line assets. Both companies have even gone so far as to have folks like Steve Forbes issue editorials proclaiming DSL lines are dead -- news to those for whom that's their only reliable connectivity option.

It's of course not just rural regions that are impacted by this shift: Baltimore's one of several cities (like Boston, Alexandria and Buffalo) that didn't get chosen for Verizon's now-dead FiOS expansion plans. With Verizon not willing to spend the money for further FiOS expansion, the company needed something to tell locals that not only aren't seeing upgrades, but in some cases are now waiting months for repairs. This month's excuse? Parts are just too hard to find:

"It's not just the wires that are going bad, it's the switches," said Sherry Lichtenberg, the principal researcher for telecommunications at the Washington-based National Regulatory Research Institute. "It's really hard to find parts." AT&T officials have said the company sometimes has to scrounge on eBay for parts."

Yes that's AT&T, a company that saw $132.4 billion in revenues last year, claiming that it has to head to eBay to upgrade its networks. Of course, parts aren't hard to find when you replace those older parts -- like in more upscale development communities where AT&T is slowly starting to offer very limited 1 Gbps fiber deployments (deployments, it should be noted, that AT&T also claims it paused over net neutrality). Parts also aren't hard to find when you're offering wireless LTE services with $15 per gigabyte overages. Parts are, apparently, only hard to find in areas you're intentionally abandoning -- but don't want to admit you're intentionally abandoning.

from the nobody-believes-you-any-more dept

As we've been noting for some time, despite a lot of lip service to expanding broadband availability, AT&T and Verizon have been backing away from unwanted fixed-line broadband customers for years, either offloading them to smaller phone companies packaged with oodles of outstanding debt, or willfully neglecting to upgrade (or in some cases even repair) these users in the hopes they'll flee to wireless (or cable, where they'll be pitched wireless service anyway). Both companies clearly want to focus on wireless services, where caps and per gigabyte overages are far more profitable.

The problem is that in many markets this is going to wind up giving cable broadband a stronger monopoly over fixed-line broadband than ever before, resulting in even higher prices and worse service than those customers currently "enjoy." Meanwhile, the companies that Verizon and AT&T sell these assets to usually struggle under debt load and lack the resources or competitive incentive to upgrade user lines to next-generation broadband. Most will spend much of the next five to ten years struggling to get close to the FCC's new 25 Mbps broadband standard.

After selling off huge chunks of its fixed line networks to Frontier and Fairpoint years ago, Verizon has now announced it's actually selling all of its fixed-line broadband customers in Texas, California and Florida to Frontier Communications in a deal worth around $10.5 billion. The move's a great one for Verizon, which again gets to offload customers it never wanted alongside packaged debt, regulatory obligations and union woes. Investors don't think it's a great move for Frontier, which appears to be acquiring these quickly deflating copper assets simply for the sake of growing larger.

Anyway, point being, this is something Verizon's been working on for years now, and it's got nothing to do with net neutrality. Former CEO Ivan Seidenberg was bullish on fixed-line broadband, thus the $24 billion FiOS investment. New CEO Lowell McAdam lacks the patience for the slower ROI of fixed broadband, and has been planning Verizon's exit from fixed-line services since he was named the new CEO four years ago. So it's funny to see Verizon last week feebly trying to blame Title II and net neutrality for the company's decision to focus solely on wireless:

"The agency’s efforts to re-regulate the Internet have created uncertainty in the telecoms industry," McAdam said. He warned against the new proposed rules, also alluding to AT&T's recent acquisitions of two carriers in Mexico. "Washington should be very thoughtful how they go forward here," he said. "This uncertainty is not good for investment, and it's not good for jobs here in America."

There are a number of things wrong with that statement. One, as already noted, Verizon was already making this shift and it had nothing to do with net neutrality. Two, AT&T's entering Mexico because wireless is profitable -- they're not running to Mexico to hide from the FCC, which is just a stupid argument. Three, if Title II is so bad, why is the company acquiring these assets telling everyone Title II is no big deal?

"(Frontier CEO Maggie) Wilderotter said she was quite comfortable with what’s called “Title 2” regulation because Frontier already operates under those rules in many areas, and she noted that the proposed rules didn’t impose fixed broadband rates."

Four, it's worth reiterating for what feels like the fiftieth time that the regulatory "uncertainty" surrounding neutrality was actually caused by Verizon when it sued to overturn the FCC's original, flimsy rules the rest of the broadband industry was ok with. It's almost as if Verizon wants to add insult to injury lately by not only fighting net neutrality, but doing it using the flimsiest arguments humanly possible.

from the come-for-the-low-prices;-stay-for-the-features dept

By now, you may have already read last week's news, broken by The Information (paywall -- but coveredwidelybylotsofothersources), that Google plans to launch a mobile cellular service in the US late this year -- as an MVNO (Mobile Virtual Network Operator -- basically offering a cellular service, but using someone else's physical network).

This is huge news, and it is correctly observed that this is likely to shake up the industry. The Google virtual network, rumored to be called Nova, will run on top of not one, but two infrastructure-based network operators: T-Mobile and Sprint. By combining the two, Nova can have wider geographic reach, higher average data speeds, and higher average signal strength. It may also be possible to bond the two carriers together to get much faster speeds. Nova could also benefit from lowest-cost routing, running on whichever network's costs are lowest in real time.

Analysts have suggested that the threat of Nova will strike fear into the hearts of Verizon Wireless and AT&T, and perhaps it does. Sprint and T-Mobile, whether combined by a merger, or virtually by Nova, are still a far more formidable competitor than each alone. And Google is known for offering services for free (or very cheap compared to industry norms). I wouldn't expect to see any kind of free cellular service here. At best, Google will offer the service above cost, which I'd estimate could start as low as $15 per month. And that's the crux of most of the news coverage: "Google to attack market with low price."

But most of the analysis thus far has left a lot of forward-looking ideas on the table. I'm betting that Google has much more in mind than a relatively low-price cellular service that can ride on the best signal of two networks. Here are some ideas Google should look to push out, and if they do, it will reveal how this MVNO is a huge strategic play for Google:

Nova will not be a virtual network that aggregates two disparate networks. It will aggregate three. The increasing spread of WiFi hotspots and their IP-based connections are a no-brainer. And if Google seeks to keep prices low, it can offload as much data as possible onto users' home and work WiFi networks. Expect the Nova virtualization layer to incorporate IP connections from Sprint, T-Mobile, and WiFi.

That said, it makes sense for Google to jump into telecoms now, when an IP-only network is finally feasible. LTE provides the low-latency data connections required for VoIP. I expect Nova to be either all-VoIP, or at least mostly so. This lowers the operational expenses versus a conventional cellular service, which has to manage classic circuit-switched voice networks and an IP data network in parallel.

To further drive down the costs of the network, and increase the amount of WiFi offload, I wouldn't be surprised if Google either partnered with, or copied a company like Devicescape*. Devicescape is a firm that has aggregated millions of public hotspots into a "Curated Virtual Network" (CVN). This firm, or similar competitors, has already developed and demonstrated the technology to virtualize millions of diverse WiFi into one virtual layer. Google will probably follow on the heels of Republic Wireless, which uses the CVN and keeps costs down by being a "WiFi-first" cellular MVNO on Sprint's infrastructure.

It's rumored that over at Sprint, which is now owned by Japan's Softbank, the driving force for this deal was Masayoshi Son. Son isn't known for modest market disruption. He goes big. He spent $21.6 billion to acquire a controlling interest in Sprint, and one of the key assets of the deal isn't Sprint's current standing in the US cellular market -- it is Sprint's tremendous (yet fallow) spectrum holdings at 2.5GHz. Now, with all that money spent, a question looms: What deep pocketed partner could be entreated to help invest the capital required to develop LTE-A networks on that spectrum? Google certainly comes to mind. At the very least, a popular Google MVNO would bring demand for data that would help Son develop and utilize his US spectrum assets.

That covers the network upheaval, so now onto phones and devices.

Google's Nexus phones have always been a success at pushing along the other phone makers and carriers, but less of a success in terms of sales volume. But the Nova network could change the outlook for Nexus sales. As it stands, the Nexus 6 is among the few phones that already has the right radios for both Sprint and T-Mobile's different networks and frequencies. The mere existence of Nexus line proves that Google can get phones made to meet its precise needs (a huge feat, for anyone who knows this industry). But, up to now, Nexus phone functionality has been both driven by Google and also limited by mobile carriers. No sense building in features that carriers or their networks won't support, right? And that's Nexus, the most un-encumbered phone model available. Every other handset OEM out there gets pushed around even more by the powerful carriers, since carriers are the bulk buyers of the devices. So far, Apple is the biggest exception. Apple has fought and won more vertical market power than any handset vendor ever. Apple can drive many features to market, but even so is still limited by carriers: Remember tethering, or FaceTime being blocked? But what if Google were the carrier for its own Nexus phone? There would be nothing between the services it conceives and the customer. So, Google will sell more Nexus phones, and the phones willenhance the Nova network's functionality. And all with low capital invested or risked, since Google owns neither phone factories nor network towers.

And in fact, the Nova network is just the "Nexus One of cellular networks." Let's not forget the Nexus One phone success strategy: Either Nexus succeeds and sells high volume, or it fails, but still pushes other stakeholders along towards Google's market objectives. You can substitute the word "Nexus" in that sentence with either of: "Google Fiber," "700MHz FCC Auctions," "Android," or "Nova" for that matter. It's a great strategic play for Google: Heads we win...tails we win. But there is thin ice here with respect to Fair Trade -- it's not fair for Google to deliberately fail in the cellular market, or lose money just to bring down its competitors (the economics term is "dumping"). But, in this case, Google can easily try to make Nova a money-earner, and/or a strategic win. And the WSJ has reported that Google is not strictly pursuing a low-price service.

So, the phone hardware issue is also disruptive. What about services, features, and functionality? Now comes the icing on the cake:

An unconstrained Google phone on its own network, running all-IP would unleash many of the company's disparate services that have somewhat languished as orphans for years. Google Voice could be the entire voice component of the Nova network, featuring cheap worldwide VoIP, visual voicemail, and voice messaging a.k.a push-to-talk. Hangouts would be the default chat and SMS app.

Where else does Google have ambition, and could the phone fit in there? The Android Auto efforts, perhaps? Connected home via its assets Dropcam and Nest? Why not. A Nova Nexus could easily be a hub inside a connected car, leveraging the car's display with Android Auto. Throw out voice commands using your car's microphone telling your garage door to open and to turn off your home alarm. The Internet of Things? Sure, Google can be more creative, and offer very interesting pricing models in IoT, if it operates its own MVNO.

Now, to push some boundaries, what about total communications convergence? Think "smartphone in the cloud". Google could take Chrome on the desktop, Google Apps on iOS devices, and Android tablets and reproduce the full range of communications services from the phone. Sitting at your desk, but forgot your phone at home? MMS, SMS, and other chat services would just pop up on your PC. You could make voice calls using the same number from anywhere - one cellular account, but on any device. Need to make changes on your mobile phone? Do it remotely from your PC. And it's not just computers that could access the phone's features: your TV, your car, or your Microsoft Hololens could each be virtual iterations of your phone. Suddenly, your "communications self" is liberated from this 5" brick to which we've become so attached. Your "self" follows you, not your phone. Google has been working on many of these ideas for years. You can use Google Voice, and Google Hangouts on a smartphone and a PC, but it adds complexity for users because the phone still has another voice service, another SMS app, and phone number as its identity. That phone identity historically has been locked within a carrier's garden walls. But with Nova + Android + Nexus, Google can remove the entire construct of walls.

Can Google promote, market, and sell a device? Well, the company has learned a lot since the first Nexus One. The Play store is now much more polished, and it successfully sells devices every day. Google can easily promote its network and phones in its search results, or in millions of other ad inventory spaces that it manages. Support was a noted weakness of the first Nexus One, but even that has come a long way. Google now has a few years of experience in customer support through projects like Google Fiber. So, while support is unlikely to be a specific strength for Google, the bar isn't really set that high, is it?

Now, none of this is a slam dunk. Analyst Phil Goldstein wrote over at FierceWireless that there are 5 reasons why Google's MVNO will fail. And while I disagree with five of his five points, it is true that there are numerous hurdles to overcome. Goldsteins five points, in aggregate, represent true barriers. And we've seen lots of big profile MVNOs fail. In fact, on the US docket, the more ambitious the MVNO, the lower the track record of success. The failures have stemmed from high handset cost (ESPN), an app posing as a carrier (Amp'd), no clear target market (Disney), high marketing and Subscriber Acquisition Costs (Helio). To counter, I would argue that Google has the ability to produce hardware at the right price points, has a very wide audience of Android and Google users, and has good access to their markets using existing web properties. And it's not all doom and gloom, lesser MVNOs have frequently found measured success: Simple Mobile, Republic Wireless, TracFone, Virgin Mobile, etc. And none of those had the structural advantages, or deep pockets that Google has.

In short, there is a lot more below the surface of a Google MVNO. You can bet that the ambitious people steering this thing are not simply thinking of "a new network using T-Mobile and Sprint, but slightly cheaper."

*Disclosure: In the past, I have been a consultant for Devicescape. I haven't had a professional or financial connection to the firm in over a year.

from the let's-play-make-believe dept

You'll recall that the CTIA recently argued that the wireless industry doesn't need to be governed by net neutrality rules (or any rules, really) because it's a sector that's just so gosh-darned competitive. And while it's true T-Mobile has been shaking things up of late (thanks in part to regulators blocking the AT&T acquisition), the market's big four players continue to make it clear that once you dig past a number of largely cosmetic promotions, the sector still isn't really all that competitive. That's especially true when it comes to seriously competing on price, something all four major carriers repeatedly make clear they intend to avoid at any cost.

Case in point is T-Mobile's latest effort to offer rollover data, or letting users store unused bits and bytes at the end of the month for future use. I already noted how AT&T's competitive response to this was to offer a rollover service of its own that's largely a joke; rolled over data allotments only having a shelf life of one month, and that data being unusable until you finish your normal data allotment. Yet that's better than Verizon Wireless, which responded to the growing trend toward rollover data by refusing to participate entirely:

"We're a leader, not a follower," (Verizon CFO Fran Shammo) said in an interview on Thursday..."We did not go to places where we did not financially want to go to save a customer," Shammo said. "And there's going to be certain customers who leave us for price, and we are just not going to compete with that because it doesn't make financial sense for us to do that."

Of course, when a market is truly competitive, you're not supposed to have a choice in the matter. While Verizon pretends it doesn't compete on price because it offers a "premium experience," the reality is Verizon doesn't compete on price because it has used regulatory capture to build a market that ensures it never has to. The result is a Verizon-AT&T duopoly that owns most of the nation's spectrum, dominates 80% of the retail market, and enjoys a stranglehold on the special access (fiber backhaul) market. As a result, Sprint's been barely hanging on for years, and T-Mobile's owner Deutsche Telekom isn't sure T-Mobile can survive long-term. What the media calls a "price war" is more like a "light price scuffle."

It's something worth remembering the next time someone (usually a wireless industry lobbyist) tries to tell you the wireless industry is ultra-competitive (or doesn't need net neutrality protections) simply because there are four companies in play. What we usually see, with the occasional exception, is a pantomime of real competition. In this case, Verizon can't even be bothered to go that far.

from the walk-the-talk dept

Sprint today shocked everyone with an announcement that the company has decided to throw its support behind Title II-based net neutrality rules, shifting the Title II momentum needle just that much further. In a letter from Sprint’s CTO Stephen Bye to FCC chairman Tom Wheeler (pdf, spotted at GigaOM), Sprint argues that it's fine with Title II, provided the rules allow for sensible network management. To hear Sprint tell it, sensible neutrality rules using Title II and forbearance will also have no impact on its investment strategy, despite plenty of industry hand-wringing on this front:

"So long as the FCC continues to allow wireless carriers to manage our networks and differentiate our products, Sprint will continue to invest in data networks regardless of whether they are regulated by Title II, Section 706, or some other light touch regulatory regime."

AT&T, Comcast and Verizon have repeatedly tried to claim that Title II-based rules will kill industry investment, even though they've been quietly telling investors Title II really isn't a big deal. As the recent $45 billion spectrum auction and wireless investment (wireless voice falls under Title II) make clear, Title II has never really been an impediment to wireless or wireline investment. Smaller ISPs like Sonic.net have similarly noted that Title II-based neutrality rules are only going to be a problem for companies engaged in bad behavior.

In addition to being good for consumers, Sprint's announcement is an incredibly clever marketing move. By publicly supporting Title II, Sprint has thrown a spotlight directly on T-Mobile's failure to support net neutrality. While T-Mobile has made an often justified reputation the last year for being a fierce consumer advocate, the company has opposed Title II and shown through its Music Freedom program that it may not even understand what net neutrality is. Sprint's support for Title II by proxy demands that T-Mobile and snarky CEO John Legere walk the talk.

Of course we'll still have to see well-constructed rules crafted after a lot more bickering over what "differentiated products" and "fast lanes" actually are. The rules will then have to run the endless gauntlet of ISP lawsuits and emerge intact on the other end, then remain intact should there be a party change impacting FCC leadership. Still, judging from recent comments, there's every indication that FCC boss Tom Wheeler is going to shrug off concerns about his lobbyist past and actually do something good for consumers here, something that was unfathomable to most just one year ago. That's big, however you slice it.

from the your-privacy-preferences-now-mean-absolutely-nothing dept

A few months ago, we noted how Verizon and AT&T were at the bleeding edge of the use of new "stealth" supercookies that can track a subscriber's web activity and location, and can't be disabled via browser settings. Despite having been doing this for two years, security researchers only just noticed that Verizon was actively modifying its wireless users' traffic to embed a unique identifier traffic header, or X-UIDH. This identifier effectively broadcasts user details to any website they visit, and the opt-out settings for the technology only stopped users from receiving customized ads -- not the traffic modification and tracking.

AT&T responded to the fracas by claiming it was only conducting a trial, one AT&T has since claimed to have terminated. Verizon responded by insisting that the unique identifier was rotated on a weekly basis (something researchers found wasn't true) and that the data was perfectly anonymous (though as we've long noted anonymous data sets are never really anonymous). While security researchers noted that third-party websites could use this identifier to build profiles without their consent, Verizon's website insisted that "it is unlikely that sites and ad entities will attempt to build customer profiles" using these identifiers.

As such, you'll surely be shocked to learn that sites and ad entities are building customer profiles using these identifiers.

Not only that, they're using the system to resurrect deleted tracking cookies and share them with advertising partners, making consumer opt-out preferences moot. According to security researcher Jonathan Mayer (and tested and confirmed by ProPublica), an online advertising clearinghouse by the name of Turn has been using Verizon's modifications when auctioning ad placement to websites like Google, Facebook and Yahoo for some time. When asked, Verizon pretends this is news to the company:

"When asked about Turn's use of the Verizon number to respawn tracking cookies, a Verizon spokeswoman said, "We're reviewing the information you shared and will evaluate and take appropriate measures to address." Turn privacy officer Ochoa said that his company had conversations with Verizon about Turn's use of the Verizon tracking number and said "they were quite satisfied."

Like Verizon's implementation of the program, Turn lets users opt out of receiving targeted ads, but users have no way of really opting out of being tracked or having their packets manipulated without prior consent. As the EFF notes, your only option is to use a VPN for all your traffic, or to use a browser add-on like AdBlock, which doesn't fully address the issues with the use of a UIDH header. Amusingly, Turn tries to claim to ProPublica that it's actually using Verizon's UIDH to respect user behavioral ad opt out preferences, but the website found that repeatedly wasn't working:

"Initially, Turn officials also told ProPublica that its zombie cookie had a benefit for users: They said they were using the Verizon number to keep track of people who installed the Turn opt-out cookie, so that if they mistakenly deleted it, Turn could continue to honor their decisions to opt out. But when ProPublica tested that claim on the industry's opt-out system, we found that it did not show Verizon users as opted out. Turn subsequently contacted us to say it had fixed what it said was a glitch, but our tests did not show it had been fixed."

Even if Turn's being honest, there are plenty of companies that aren't going to bother being ethical. Verizon, which in 2008 insisted that consumer privacy protections weren't necessary because public shame would keep them honest, pretty clearly isn't interested in stopping the practice without legal or regulatory intervention. So yeah, again, we've got a new type of supercookie that tracks everything you do, can't be opted out of, and is turning consumer privacy completely on its ear, but there's absolutely nothing here you need to worry your pretty little head about.

from the well,-duh dept

It's been all but confirmed for the past couple of months that Tom Wheeler was going to put forth new FCC net neutrality rules that include reclassifying broadband under Title II. While he had been moving forward with his split the baby hybrid approach, President Obama's surprising clear support for Title II shifted the debate. At this point, nearly everyone expects the plans, to be released soon and voted on at the end of February, to include reclassification with forbearance. Yesterday at CES, Wheeler was interviewed by CEA boss Gary Shapiro, and while he didn't come out and directly say it, it was quite clear that he's going for Title II reclassification. You can see the 48-minute video if you want to catch the whole thing.

In it, Wheeler makes two key points that he (and others) have avoided making over the past year. First, a "commercially reasonable" approach doesn't actually do much for the public. As we discussed all the way back in April, the "commercially reasonable" standard is a recipe for disaster, allowing for broadband companies to put in place nasty anti-consumer practices, focusing on adding tollbooths and limiting online services. For the first time, Wheeler was pretty explicit about the problems of this standard, that he had supported earlier:

It became obvious that commercially reasonable could be interpreted as what is reasonable for the ISPs, not what is reasonable for consumers or innovators. And that's the wrong question and the wrong answer because the issue here is how do we make sure that consumers and innovators have open access to networks. That led us to a more robust investigation of the well established concept of just and reasonable, which is a Title II concept. And as I said, Title II has always been something that was on the table. So last summer we began investigating various approaches using title II as a way to get to just and reasonable because it has the best protections.

The second key point that Wheeler made, which he hadn't been making in the past (and had actually argued almost the opposite), was that there's no real evidence that Title II kills innovation. During meetings with tech companies in the past, Wheeler had said that he was worried about Title II hurting broadband investment, but it appears that he's finally realized this isn't true.

The key here (again, as we've pointed out in the past) is that Wheeler realized that mobile phone service has always been regulated under Title II and there continues to be tremendous investment in that space. In fact, Wheeler notes that the recent spectrum auction activity pretty clearly proved the point that Title II doesn't scare off investment:

After the president said what he said about Title II, we still had a record bidding for spectrum from ISPs...

Oh, and also, he pointed out that the mobile phone space has appropriate forbearance, ripping to shreds the argument that forbearance is impossible and that Title II will lead to tariffs and other burdensome regulations. As he noted, he was actually the lobbyist on the mobile side that negotiated such a deal, so he knows it works:

“It just so happens that 20 years ago I was the guy that negotiated on behalf of the wireless industry to establish Section 332," Wheeler said.

“Section 332 says that wireless should be regulated under Title II as a common carrier, except that the FCC is instructed to forbear from onerous provisions and inappropriate provisions of Title II, except for section 201 and 202, which is just and reasonable, and Section 208, which is consumer protection," he added.

[....]
”So I say to myself, 'ok there is a way to do Title II right, and sure there are many ways to do Title II that would thwart investment, but there are other ways to do Title II,'” Wheeler told Shapiro on stage. “We ought to take a look at how that fits together with consumer protection.”

Wheeler urged listeners to look at the wireless industry under Title II to see how the FCC might enforce it. “There is no need to file tariffs, there is no need to file all these informational activities,” Wheeler said. “The problem we had at that time [in the 90’s] was the wireless industry was having to go before state commissions to change rates.” Having the FCC approve all rate changes, Wheeler seemed to imply, is not what he wants.

These are all points that people have raised before... but which have been mostly ignored in statements by Wheeler until now. In fact, for those who immediately condemned Wheeler's past as an industry lobbyist, he seems to have effectively flipped the script. He's now using that past and his experiences to show that he knows damn well that the FCC can do Title II with appropriate forbearance in a way that works fine for the industry, because he was the one who negotiated it that way for the mobile industry years ago.

Again, there's nothing too surprising in the effective acknowledgement that Wheeler is finally aboard the Title II bandwagon, but what's good to see is not just his support for Title II, but the fact that he's demolishing the ridiculous and misleading complaints the big broadband players have been making against Title II and for the old Section 706 approach. That is, it doesn't look like Wheeler is cautiously stepping into Title II, but rather that he's fully onboard and is ready to defend the argument in a way that sticks.

Big broadband is going to howl and protest, but the reality is that their arguments never made much sense in the first place -- and now Tom Wheeler is making that clear as well.

from the a-fight-you're-just-not-going-to-win dept

Back in October we noted how the FCC had fined Marriott $600,000 for the company's decision to block cellular signals in the company's Gaylord Opryland Hotel and Convention Center in Nashville. The move was pretty clearly intended to prevent people from using their tethered modems and cellular hotspots, instead forcing convention attendees to use Marriott's absurdly pricey (and frequently awful) Wi-Fi service. While Marriott agreed to pay the fine, the company tried to feebly defend itself by proclaiming it was only looking out for the security and safety of their customers (what a sweetheart):

"Marriott has a strong interest in ensuring that when our guests use our Wi-Fi service, they will be protected from rogue wireless hot spots that can cause degraded service, insidious cyber-attacks and identity theft," the statement said. "Like many other institutions and companies in a wide variety of industries, including hospitals and universities, the Gaylord Opryland protected its Wi-Fi network by using FCC-authorized equipment provided by well-known, reputable manufacturers."

While Marriott is bullshitting their way around what's clearly a transparent ploy to make money, both Marriott and some observers have argued that what Marriott's actually doing may not technically be illegal under anti-jamming provisions of section 333 of the Communications Act. That's because Marriott isn't technically jamming cellular signal, it's using a deauthentication attack -- or sending packets that misleadingly disrupt communications between a client and router, making using your mobile hotspot or tethered modem impossible. Hardware vendors commonly sell gear that can accomplish this, and the practice is very common at hospitals, some corporate campuses, and events like Defcon.

Of course even if Marriott were able to successfully legally argue this defense, it doesn't mean it isn't behaving badly. The FCC also seems unlikely to listen as some very heavy hitters this week entered the conversation. In a rare show of solidarity for companies often on very different sides of key tech issues, Microsoft, Google and wireless carriers have joined forces to yell at Marriott in new filings with the FCC. All of the filings argue that yes, Marriott's behavior does violate Section 333, and yes -- it's really just about Marriott being uncompetitive to make money:

"The Commission’s authority to prohibit the interference described by Petitioners is found in the plain language of Section 333 and supported by general grants of power in Section 303, as well as other provisions of the Communications Act. Contrary to Petitioners’ allegations, moreover, the Commission’s Rule 15.5(b) does not exempt unlicensed devices from protection against intentional, harmful interference. Under its statutory authority, and consistent with its Part 15 rules, the Commission has categorically warned against the use of equipment that blocks or jams authorized communications and recently found against the exact practices described in the petition."

Given the Sisyphean feat of battling the government, public perception, and some of the most wealthy and politically powerful technology companies in the world just so you can sell some over-priced Wi-Fi, the path of least resistance for Marriott would probably be to just stop behaving like a jackass.

from the when-can-we-officially-call-it-a-boondoggle dept

Prompted by the communications network failures during 9/11, roughly fourteen years ago the government began exploring the building of a nationwide emergency communications network specifically for first responders and emergency personnel. While it took a decade of Congressional bickering, the Middle Class Tax Relief and Job Creation Act of 2012 finally created the First Responder Network Authority (FirstNet). FirstNet was given $7 billion and tasked with building a nationwide LTE network that largely piggybacks on the networks of existing carriers, delivering what the project's website declares will be a "a force multiplier, increasing collaboration to help emergency responders save more lives, solve more crimes and keep our communities safer."

Except as we previously noted, allegations emerged early on that the project had been stocked with executives from the nation's biggest wireless carriers, who were criticized for giving closed-door preference to AT&T and Verizon friends, and elbowing out folks with actual emergency, first responder or emergency backgrounds. The result was a project that has seen little actual progress, gridlocked by a raise by the carriers to corner the billions in project funds. To ease concerns, the organization investigated itself late last year and unsurprisingly found no indications of wrong doing or conflict of interest.

Fast forward a year, and the Office of Inspector General of the Department of Commerce has released a report (pdf) that's nowhere near as forgiving. According to the study, there were numerous conflicts of interest, and FirstNet board members were pretty fast and loose when it came to adhering to disclosure rules, either filing late, or when they did file -- not actually bothering to disclose conflicts of interest that did exist:

"Finally, all four of these Board members continued to engage in decision making, even though they were not in compliance with the financial disclosure requirements. Departmental officials could have elevated or called attention to these issues, in order to prevent or remedy these conditions. But, without a more effective ethics program in place for FirstNet, the Department has not created sufficient internal controls to ensure a sound process for the filing of Board members’ financial disclosures."

While it uses very polite language to say so, the report unsurprisingly found that conflict of interest problems arose because FirstNet wasn't paying very close attention to what few rules it had. The study found FirstNet also appears to have significant failures when it comes to expenditures, decision documentation, contract bids and transparency, pretty much across the board:

"...the FirstNet Board operational procedures for monitoring potential conflicts of interest need improvement...In addition, FirstNet contracting practices lacked transparent award competition, sufficient oversight of hiring, adequate monitoring, and procedures to prevent payment of erroneous costs...Inconsistencies in record keeping and administration suggest a lack of active or centralized supervision and quality control, thereby creating gaps in oversight and increasing the risk of noncompliance with disclosure requirements among FirstNet Board members. This is especially critical, given Board member ties to the telecommunications industry."

The government is apparently still in the process of determining whether any of the violations require "additional administrative action," though many of the original board members (and FirstNet GM and former Verizon exec Bill D'Agostino) have already moved on. FirstNet chair Sue Swenson, meanwhile, acknowledges that "some administrative missteps" took place, but insists that the project is finally on the right path. Hopefully that's comforting to the people who'll be impacted by the major domestic disasters of the last few years. At least we still have ham radio operators, who'll probably still be carrying disaster communications responsibilities on their volunteer shoulders a decade from now.